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NIKKEI 225 INCHES UP ON SUSPECTED BoJ AND PENSION BUYING - Capital Street FX

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    • NIKKEI 225 INCHES UP ON SUSPECTED BoJ AND PENSION BUYING
17-Mar
18:17 IST

Nikkei 225 futures are currently trading at 16510-higher by 0.96% as compared to the previous closing. The contract, however, closed in the negative territory in the last trading session.

In the Cash Markets, the Nikkei 225 added 0.056% to close at 17,011.53 on Tuesday. The benchmark index hit its lowest level since November 2016 during the session.

The Nikkei 225 edged higher today as suspected buying by Japan’s central bank and public pension funds lends broad support.

Although overall sentiment remained fragile, as lockdowns in the US and Europe to limit the spread of the China-linked virus increased fears of further economic fallout from the epidemic that has frazzled markets around the world.

The Nikkei’s volatility index dropped 7.3% to 56.27 on Tuesday.

The Japanese central bank pledged on the previous day to buy Exchange Traded Funds aggressively at an annual rate of up to $113 billion until markets stabilize.

Investors said the GPIF and other public pension funds could also have purchased shares to rebalance portfolios.

All except two of the 33 sector sub-indices on the Tokyo Stock Exchange ended in positive territory on Tuesday. Fish & Forestry, electricity & gas, and paper & pulp were the top-performing sectors today.

Food makers and game companies outperformed today. Nichirei Corp rose 3.63% on Tuesday.

On the other hand, index component Fast Retailing Co Ltd fell 4.8% after the company said it will temporarily close all 50 Uniqlo outlets in the US due to the epidemic.

Inpex Corp slumped 4.4% after crude oil dropped below $30 on the previous day.

The broader Topix added 2.60% to close at 1,268.46 on Tuesday. The index touched its lowest level since June 2016 during the session.

On the economic front, the Japanese Industrial Production (MoM) for January released earlier today came in at 1.0%. Industrial Production was above the consensus estimates of 0.8%.

On the technical front, the RSI is currently at 20.75% and suggests that the market can move in the downward direction. The current price is below the MA5. The %K has crossed the %D from above to the downside at around 15% and suggests that the market can move in the downward direction.

Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.

 

Trade Suggestion- Limit Sell At 16530 Take Profit At 16230 Stop Loss At 16680

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